Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.
For the fourth-straight week it appears that the broad-based S&P 500 (SNPINDEX:^GSPC) is starting off on shaky ground. The culprits today appear to be weak U.S. economic data and a report from Dow Jones that has reignited U.S. debt-ceiling fears.
While not often viewed as a huge report, the July U.S. durable-goods report (a measure of big purchase items like cars and appliances) was so bad — a drop of 7.3% from the previous month — that it certainly caught investors’ attention. To abate some of this negativity, a 52% drop in civilian aircraft orders was a big component to these weak results, but it still could point to weak third-quarter GDP growth if spending on big-ticket items is beginning to dry up.
The other concern came from Dow Jones, which reported that the U.S. Treasury will reach its current debt limit by mid-October. And we all know what that means, right? You bet: More Congressional bickering! The past few debt-limit crises have come down to the wire, with both parties kicking the can further down the road instead of working out a solution. This is one of those broad-topic issues that has the potential to affect all sectors if nothing is worked out.
By day’s end, the S&P 500 had digested all of this negative information and given up all of its gains, ending lower by 6.72 points (-0.40%) to close at 1,656.78.
As should come as no surprise, biotechnology giant Amgen, Inc. (NASDAQ:AMGN) led the S&P 500 higher, gaining 7.7% after announcing the $10.4 billion ($125/share) all-cash purchase of Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX). With Amgen, Inc. (NASDAQ:AMGN)’s pipeline aging, this deal gives it a fresh line of rapidly growing cancer-fighting compounds, including multiple myeloma drug Kyprolis, which could fetch $3 billion in annual sales at its peak. Based on my initial estimates that Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) could be worth as much as $145 a share, I think Amgen, Inc. (NASDAQ:AMGN) scored a nice value on Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) and would definitely suggest giving Amgen, Inc. (NASDAQ:AMGN) another look here even after its recent rally.
Logistics company C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), a new name to the best-performers list, added 2.9% today after announcing plans to increase its buyback authorization.